The newest thing about the New Economy? The notion of tough times and economic failure. It's something that many business leaders have either forgotten about or never experienced. What's the best strategy for making it through a bad patch?

Lee Iacocca
Founder and Chairman
EV Global Motors
Los Angeles, California

After 50 years in business, I can tell you that there are no free lunches. There are no overnight sensations. All of the clichés in the world are true. Unfortunately, a lot of young businesspeople are learning that truth the hard way right now. But shakeouts are a fact of competition. Did you know that between 1909 and 1919, there were 120 car companies? How many are left in the United States today? Two.

But don't get down at the first downturn. Just be sure to take care of your customers. You have to go eyeball to eyeball with them and say, "Do I have a deal for you!" And then stand behind your product or service. If you take care of your customers, everything else will fall into place.You have to understand your customers and follow them. You have to change as their lives change. I've followed baby boomers all of my business life. I got them first with the Mustang around 1964. And then 20 years later, when they acquired kids, dogs, and nannies, I got them again with the minivan. Now I'm planning to get them again with the electric bike. But in a downturn, you have to knuckle down and ask yourself, "What the hell really works here?" We started out distributing our bike through car dealers. Now we see that we've also got to move into areas like resort communities and rentals. Even after all of these years, I still have to get back to fundamentals: If you don't have the right distribution system, you've got a problem.